Virginia Hospital Center corralling physician groups

Virginia Hospital Center is consolidating its 100-plus employed physicians into one multi-specialty group under a single brand, building market clout and tightening doctor ties to the parent hospital in an effort to better control cost and quality.

The freestanding Arlington hospital will step away from its current private-practice model, in which its doctors work in small specialty-oriented groups that operate largely as independent subsidiaries, sometimes with different tax identifications and computer systems.

By early next year, all practice locations will be rebranded as offshoots of the hospital. For instance, Washington Urology will now be known as “Virginia Hospital Center Physicians Group – Urology.”

More importantly, all practices will join a single patient record-keeping software platform, an eClinicalWorks product, which will connect to the hospital’s central patient records software program.

All told, the transition will cost between $5 million and $10 million, said hospital Chairman Dr. John Garrett, who is also director of physician services. The branding will play out over the rest of the year and the computer changeover should be done by March, he said.

“We expect that will give us clout in negotiating with payers, but there are also huge numbers of other wins as far as creating efficiencies across the practice, operational changes and also allowing physicians to hear what’s happening in other practices, to develop standardized protocols,” Garrett said.

Historically, doctors operated as independent professionals who contract with multiple hospitals for admitting privileges. Several hundred physicians continue to practice at VHC under that arrangement today, as well as Permanente Medical Group doctors who work there under a contract with Kaiser Permanente.

But as health reform has pressed providers to meet higher expectations with flat or declining revenue, hospitals and doctors have come together in unprecedented ways. Virginia Hospital Center started recruiting aggressively in 2008 and hopes to continue building its roster of directly employed doctors.

The consolidation could reverberate quickly in the market, because northern Virginia’s medical landscape remains more fragmented than most, and the single-brand VHC group would instantly become one of the largest cohesive medical practices.

While doctors remain leery of getting too close to any one hospital, Garrett said Arlington physicians have become more amenable to tying up since executives first started to recruit. Now, after working under the current model for several years, they’re less worried about taking another step closer, he said.

“I think that doctors have seen that we’ve held up our end of the bargain,” Garrett said. “They see a value in becoming part of the Virginia Hospital Center brand in a different way than perhaps they would have seen it six years ago. This is the right time for this to happen.

Last year, I wrote about the hospital’s success with Crimson, a software product developed by D.C.-based Advisory Board Co. Crimson allows management to pinpoint costly variances in doctors’ treatment patterns and patients’ results. In addition to cutting costs, those efforts have helped the hospital score well on a variety of quality measurements.

Steve Messinger, a health care consultant at ECG Management Consultants Inc. in Arlington, said the hospital is stepping in where the doctor community has missed an opportunity to join up on their own.

“It’s been a long time coming,” he said. “It’d be in their interest to band together, but we just haven’t seen any aggregation strategy that physicians could pull off on their own. What we’re finding is hospitals are becoming aggregators.”